but they grew by a third of that this year. and potential sellers are still underwater on their mortgages or worried about finding a move up home themselves. supplies are down across the nation. that has made the competition tough for buyers. >> we've put in over 30 offers and we were outbid in each of them. >> liah has been searching for a home in atlanta since december. >> two years ago, i went in and people could not get their asking price and now it's -- it's really tough to even ask, asking price, now you have to bid over. >> low supply has caused prices to soar higher and faster than expected. gains hit the double digits, and it's adding to the lack of supply. >> if i'm underwater in my

effect and now i'm suddenly not, and i'm up 5% and the market is appreciating 6, 7, 8, 9%, why not wait. >> not only are buyers desperate, so too are real estate agents. people are finding cards saying what would it take to get you to sell. >> one of the top websites zillow has a feature called make me bhmove. the realtors are begging the builders. the builders have their own supply issue. lack of land, labor and material. that will keep sales and listings low for the foreseeable future. for "nightly business report" in washington. >> more details now on those caterpillar earnings, caterpillar reported a first

quarter profit. and revenues came in below expectations, down 17% to $13.2 billion. now, both misses are blamed on a global slump in mining. caterpillar slashed earnings estimates for 2013 because of a slump in mining. when i talked with the ceo earlier today, i asked him about the key factors for the revisions in caterpillarers out look. >> we obviously adjusted our out look for 2013, and brought the top line down about $5 billion and it's done around our mining business that has slowed significantly and is continuing to slow. i do feel the mining business could be at or near a floor. so i feel a little better about that and we just held our bottom line at about $7 a share.

>> so, doug, tell us about the mining business is, how long is this slump going to last? is this a temporary rough patch? >> i do think the mining rough patch is temporary. but the definition of temporary is something that i cannot define. something that is interesting that we are watching closely, our traditional mining truck business here in caterpillars, the trucks that we made, the off highway trucks t huge 400 ton trucks that we built for decades is off 50% from the peak. with our acquisition out of ocirus, that production is only down 15%. thankfully we have that acquisition, there's a lot of mining going on in the world and big expansion products that are occurring. while mining is occurring every day, our after market business is doing fairly well and as we look forward the economy continues to grow, which we

think it will. construction continues to grow, which we think it will, mining has to follow at some point. and it will, it is a question of the temperatuorary. the definition you mentionsed. >> what about u.s. construction? how much of an improvement are you seeing? >> the housing business is recovering. in fact, we are calling for about $1.1 million in starts. that is way below the peak of a few years ago, it triple what it was at the bottom, at 2009 and 2010 and we are seeing and it feeling it from our customers every day. it's fairly widespread. i was in florida and we had miami people talking about a condo boom in construction. you can see new subdivisions being built, it's building up again. >> tell us about china. what are your customers telling

you there about businesses? we are getting mixed reports about a slow down? >> i think mixed is probably the way to look at that. we have poks doing well. overall, the kmie knechinese aus have brought the growth rate down, that is exciting. it's still a good growth rate and there's a lot of things they are trying correct from the bubble they had there in the last five years. overall, the inventories have have come down significantly in china, and we had a couple of good months in terms of our sales and customers. our second quarter should look better in china. a bit more optimistic with china. >> you announced a stock buy back program, is there a number that you expect for caterpillar

stock to be next year? >> we have quit a bit of cash on our books and with the price of the stock and the multiples, we felt it was an opportunity to do it. we will contribute a billion dollars under the plan that is outstanding and it's the strength of the balance sheet. we can take it and we felt it would be a good time to do so. >> that stock buy-back announcement could be one of the reasons that their stock soared to $82.71. >> while caterpillars may be seeing blue skies ahead, if you fly, you may be seeing red. airports all across the country may be experiencing big delays as air traffic controllers are furloughed to save money t impact of the federal budget cuts from the so-called sequester. we have more on how the cuts could change your travel plans right now and through the summer. >> both new york's laguardia airport and lax in los angeles,

featured major delays in the first 48 hours of fewer air traffic controllers on duty nationwide. the next six month, 15,000 air traffic controllers will be furlou furloughed, losing at least a did day a's pay every two weeks. >> traveling is stressful enough, when you don't know how long it will take you to get lew the line, you have -- through the line you have to add extra time to get through point@to point b. >> i believe if you want to prove a point, aggravate the average american. >> delays are just the beginning they say of what could be a nightmare for airline travelers. >> here in laguardia, it means that a delay means you miss your connection in chicago. everyone will get hit. >> the major airlines claim about a quarter of the 27,000

commercial flights per day, could be impacted, their trade association is suing the faa to halt the budget cuts. >> the faa has and should have exercised the discretion not to furlough air traffic controllers who never in the history have been furloughed before by any budget sequestration or any shutdown of the faa or anything like that. >> and even the white house admits this was never supposed to happen. at reagan national airport, i'm hampton pierson for "nightly business report." >> flying may be more difficult these days but there's good news for drivers. prices at the pump are down $.11 a gallon over the last two weeks and could fall by another.20 as we get closer to memorand e err

memorial day. leading sectors were energy and technology, ahead of the after the bell earnings. the dow ended the day 19 points higher and the s&p 500 added 7. the price of gold rebounded today, surging nearly $26 to $1,421 announced. but last week as the price of gold was falling, investors pulled $2.7 billion out of gold exchanged traded funds. most of the money was invested in international stock. >> turning to market focus. texas instruments reported the profits were higher than last

quarter. shares gained 1.5% at the dloes and were up on the earnings news after the bell. microsoft was the bigger dow gainer today and an activist hedge fund is taking a $2 billion stake in that company. they are bidding up microsoft up more than 3.5%. >> haliburton was the top performer and they are close to settling claims from the deep water horizon explosion. it's set aside a billion for settlement cost, that -- aside from that, the operations report reported strong earnings and the investors were pleased to see progress from the between -- 2010 explosion. >> shares for general electric near the bottom of the blue chips. it was down graded from over

weight to neutral after the caution from ge about the industrial business. coming up, is the end of tax-free online shopping near? we will present both sides of a hot debate that could impact your money. first, a look at how the international markets closed today. >> when you buy items over the internet, do you pay taxes on them? apparently a lot of us don't, there's no legislation that is aimed at making sure that everyone pays up no matter the

state they live in. and a vote could come this week. we are in washington with more of the very controversial legislation. so, who is behind this move on collecting more sales tax? >> well, it's a good question. it's something the retail industry has wanted to do for more than a decade, make sure that internet vendors collect sales tax for products sold online. the united states senate is taking up a bill that would allow states to collect sales taxes from us of state companies. >> there's some items where consumers are price sensitive and online retailers that do not collect sales taxes can under ku cut can the brick and mortar retailer by 10% because of the situation. >> that ends up for big money for hard hit state budgets. >> state loses $103 million last

year alone. that is a pretty big chunk of our budget. that sounds silly to california, on the other hand, california loses about $4 billion plus. >> amazon the nation's leading online retailer supports the bill, preferring the simplicity of one national standard but e bay and others are criticizing the bill saying that mom and pop retailers are not equipped to the collect sales taxes. >> we don't know that for a fact, but the fact that the way this bill is drafted opens up the question that it could apply to services and could apply potentially to electronic trades and discount trades done electronical. raises a concern that we think congress should spend time looking at.

>> white house spokesmans said that the president supports the measure and he noted the bipartisan support for the idea, the bill called the marketplace fairness act. back to you. >> thank you very much. we have two opposing points of view on the topic. we have david and steve delbianco, a group that protects online commerce. steve, let me begin with you, why do you oppose the legislation. >> fairness has lost all meaning in this town. i mean, how can it be fair when you force businesses in all 50 states to face audits, tax demands and tax collectors in 40 different states, it's becoming a burden and a barrier on businesses that want to reach customers all around the country. >> david? what is your response? >> i think steve's fair is off.

fair is when the corner store competes fairly with some electronic commerce seller from another state who is competing for the same customer. both should be able to compete on an even ground. that is fair. >> why do companies such as amazon and walmart support it when they do a lot of online commerce? >> that is easy. it's ridiculous to say that the internet does not subject itself to sales taxes. 19 of the top between e retailers collect for all the states with a sales tax and amazon will collect for over half the population under current law. e-commerce is subject to he'lls tax and more and more big ooe retailers have to collect. when you have to collect, you will take any simplifying it. >> why not answer steve, and

answer the question that i have read that this proposal that is in the -- that is in the senate and then would go to the congress, would unfairly burden small retailers. >> you know, fairness means a lot of things. and for those states without aly sales tax, those companies if they are going to do online business and do business in another state, they need to play by that sftate's rules. in the internet age with technology, that can be done. as far as what is being collected online already, for those companies who are already present every wrrks they are collectioning and have been collecting. but eelectronic retail means there are not the same borders anymore. the corner store that does not get an exemption from sales tax

is competing with the ones that do. it is about more robust competition. >> what about the argument this the online retailer has an unfair advantage. and as you pointed out, many of the companies are collecting and remitting sales tax, why shouldn't all of them do it? >> every place you have a physical presence, you have to collect. as far as main street being at a disadvantage, look at states like pennsylvania, texas, and new york. when amazon.com began to collect sales tax. there was not a rush of customers from amazon to the main street. reason? >> they do not buy online to avoid sales tax, they buy online for lower prices, choices and convenience.

the internet is here to stay. and businesses turn to the internet to reach customers. those are the ones that will run head long into the border less world that david talks about. now it's without borders for the tax department. >> address the constitutional portions that it brings up? >> the supreme court said in 1992, a time we were talking about catalogs. that that time, state laws were too complex for everyone. guess what? we are in a different day and age, everyone knows electronic commerce, the internet is here to take. it's robust and what you have now is because congress has not acted you are giving a subsidy to online retailer that is not

needed. what we need to do is treat everyone the same. if you have customers in a state with a sales tax, you should collect and remit. >> steve, you got the first word, david got the last. thank you both for appreciajoin. >> first, let's look at how co e commodities and treasuries faired today. >> china is the world's biggest

market for auto sales and may soon be the biggest market for luxury car sales. now they are pushing to appeal to the luxury car buyers in china and as phil tells us, it's paying off. >> if you believe that image is everything, you will understand why china has become a primary focus tore luxury automakers. it's also the reason they are the number one market in the world for luxury. >> we've things we can do better in the future. >> better than 71% annual he will -- annual sales growth? >> we will not have it every year, but i'm sure we can continue to write a success

story. >> in china, german luxury dominates the market. with 70% of the high-end vehicles being sold here are audi, and bmw models. >> i think back 5 years and it's a different country. when you come three times, four times a year, every time you come, you have the impression it's different from the last time i was here. new buildings and new construction. air ports. they chose the shanghai auto sales to bring out the new x-4. it's about feeding the zooming chinese auto luxury market. sales will be $3 million annually. >> the market in california ebs and flows but china is earmarked

as the luxury market. >> the boom has been a missed opportunity for some, and gm is enjoying success with cadillac sales as they are adding for dealerships here and next year, ford will be bringing the lincoln brand to china to begin sales in asia. >> it will be interesting to see how the lincoln does there. it hasz been struggling so much. aren't the numbers amazing. >> they are. and having been there a year ago, you city german brands and a large portion of roles royces. hong kong has the highest level of -- >> you want to make a splash. it's really something over there. >> well, that is it for us tonight, "nightly business report." thank you so much for watching. >> and from me as well. thanks for joining us, have a

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